A federal district judge last week signaled the use of athletes’ NIL in products and in social media posts is less about sharing news and more about advertising.
U.S. District Judge Karen Marston advanced most of a lawsuit brought by MLB Players Inc. (MLBPI, which is MLBPA’s group licensing subsidiary) against DraftKings and Bet365 over the use of MLB players’ images and likenesses in online and mobile platforms. Marston, a federal judge in Philadelphia, denied the defendants’ motion to dismiss NIL, misappropriation of publicity and unjust enrichment claims but tossed one misappropriation claim on grounds that it’s duplicative.
While the case concerns sports betting companies, its ramifications extend into other sectors of the sports industry that rely on athletes’ identifying traits in promotions and advertising.
As the exclusive licensing agent for all active MLB players, MLBPI objects to DraftKings and Bet365 using MLB players’ images, including headshots, in online and mobile sportsbook platforms. Players’ images appear alongside prop bets, such as betting that a particular player will hit a home run, and in detailing team rosters. MLBPI also takes aim at use of players’ NIL on social media, such as action shots of players in games, to urge consumers to bet.
Marston’s 54-page opinion offers a detailed take on dueling arguments about what counts as advertising and what is better understood as news.
One issue, the judge explained, is how to unpack the commercial value of MLB players’ NILs. Marston reasoned MLBPI has plausibly alleged even “lesser known” players have a “valuable interest” in their NIL. She referenced Baltimore Orioles relief pitcher Gregory Soto as an example. Soto, 30, was an All-Star for the Detroit Tigers in 2021 and 2022, but hasn’t enjoyed as much success of late. Last year, Soto had a 5.09 ERA for the Orioles following a trade from the Philadelphia Phillies. Marston reasoned she “does not need to pass judgment on the notoriety of Gregory Soto” at this stage in the litigation, instead finding MLBPI has sufficiently argued the players it represents have NIL to protect.
The judge also pointed out that MLBPI separately alleges misuse of NIL through MLBPI’s group license, which she explains is “the right to use the NILs of three or more MLB players in a calendar year.” A group license, the judge pointed out, has distinguishable NIL value from an individual player’s NIL. To illustrate, she discussed a headshot of Phillies star Bryce Harper. That headshot has “independent value to the extent it appears as part of a group of headshots, say, those with [Phillies teammates] Trea Turner and Bryson Stott.”
Marston also wasn’t persuaded that use of players’ NIL on sportsbook platforms and social media posts should necessarily be regarded as the dispensing of news. The defendants note there is a “news reporting” exception to right of publicity claims, meaning consent of a person for use of their NIL is ordinarily not needed if that use concerns reporting (such as a magazine article on an athlete). Likewise, while use of a person’s NIL for advertising products and services without consent is generally unlawful in Pennsylvania, state law authorizes use of a person’s NIL in a “news report” or “news presentation having public interest.”
The defendants reference Akeem Daniels, et al. v. FanDuel, Inc., and DraftKings, Inc., a 2018 case from Indiana involving college football players suing over the use of their names, pictures and stats in connection with advertising of daily fantasy sports. The players lost, with a judge finding that the information advertised reflected “newsworthy” aspects of college football and Indiana law exempted “newsworthy” information from right of publicity claims. Daniels is from another jurisdiction and thus is persuasive, not binding, precedent on MLBPI’s case.
While Marston found Daniels relevant, she emphasized it’s not entirely on point. The judge noted that Pennsylvania’s statute references “news reports and news presentations” rather than information that is newsworthy. Although that might initially sound like a distinction without a difference, Marston cited case law noting how “news reports and news presentations” involve the “broadcast or reporting of an event or a topic” whereas a newsworthy test does not impose that requirement. Marston further clarified that the primary purpose of a report is to convey news, not to advertise a product or service.
In that same light, the judge referenced a 1996 decision by the U.S. Court of Appeals for the Ninth Circuit concerning Kareem Abdul-Jabbar’s lawsuit against General Motors. The car company released an advertisement that referenced Abdul-Jabbar holding the record for being voted the most outstanding player of the NCAA men’s basketball tournament in the context of an Oldsmobile making Consumer Digest’s “Best Buy” list more than once. Although Abdul-Jabbar’s record was “newsworthy,” the Ninth Circuit said the use of that record in a commercial was not automatically privileged. The use occurred “in the context of an automobile advertisement, not in a news or sports account.”
Marston wrote that she “questions” whether “unique odds and prop bets” count as news reports, especially when they are “unassociated with statistics or a discussion of historical or current events.” The judge acknowledged that social media posts sometimes “look a lot like sports reporting.” But she highlighted MLBPI’s argument that a social media post operating as an advertisement suggests it is not “sports reporting” as that term has been historically understood.
Along those lines, Marston referenced Bet365 placing an image of New York Yankees outfielder Aaron Judge next to odds that MLB teams would record more than 100 wins:
Marston underscored how the post “does not mention Aaron Judge, his statistics, or the New York Yankees season to date.” She added that the “only factual information” concerns Bet365’s odds. Marston wrote she is “unwilling to hold” at this stage of the litigation that odds are news.
Marston was also unpersuaded, at least for now, that sports betting companies’ use of players’ NIL is protected by the First Amendment free speech protections. While the defendants cite cases involving use of athletes in video games, paintings, lithographs and t-shirts to assert there are relevant protections, the judge distinguished those instances from the use of athletes’ NIL on sportsbook platforms and in social media posts–especially when that use occurs without alteration. She reasoned it is too early in the litigation to determine the role of the First Amendment, adding that analysis ordinarily occurs after pretrial discovery.
To be clear, MLBPI has not won the case. Marston’s ruling only advances the case past a motion to dismiss, meaning into pretrial discovery where sworn testimony will be taken and various records, including emails, shared. It’s possible, as Marston alluded several times, that DraftKings and Bet365 ultimately prevail.
Still, the ruling is significant for the many sports companies that use social media to advertise products and services. The use of athletes’ NIL in those activities—especially when divorced from what could be construed as “news reporting”—without consent could pose legal problems as MLBPI v. DraftKings & Bet365 indicates.